Energy Infrastructure is Critical to Economic Growth

Maintaining and expanding the nation’s energy infrastructure will be critical to continued economic growth, according to panelists at the Governor’s Utah Energy Development Summit last week.

From oil and gas pipelines to rail and roadways, infrastructure brings vital energy resources to homes and businesses. Getting public buy-in to expand that infrastructure will require that industry do a better job of educating the public about the importance of energy—and how that energy is delivered to them.

“Without the infrastructure that [the panelists] are involved in, a lot of that innovation won’t be delivered to our homes and businesses,” said Rich Walje, CEO of Magnum CAES, LLC and Magnum Generation, LLC. “We all needed to do a better job of trying to explain, at least at a high level, how the infrastructure for all things like water, transportation and energy gets delivered.”

In some cases, expanding the capacity of energy infrastructure simply means maximizing the value of existing infrastructure. For example, electricity and natural gas companies encourage their customers to conserve energy and focus on efficiency in order to slow the demand for new infrastructure.

Questar Gas has a program called ThermWise that provides energy audits to consumers, said Colleen Larkin Bell, vice president and general manager of Questar Gas Company. The program helps consumers identify areas where they can improve their energy usage with things like weatherization or updated appliances.

Questar operates 28,000 miles of natural gas pipeline and serves one million customers, said Bell. While the company must expand its system to meet a growing consumer base, it has another infrastructure challenge: improving or replacing outdated pipes.

Utah gained its first natural gas pipeline in 1929, said Bell. A belt-line system was buried deep under the roadways in the 1930s, running from Ogden to Provo. Many of those old pipelines are still in use, said Bell, who added Questar is undergoing a “very rigorous campaign” to replace that old pipeline.

“Some of them are buried so deep—the one on Main Street, for example, right downtown—that we had a hard time locating it and we killed it in place and then put our new line in,” said Bell.

While educating the public about energy infrastructure is important, educating policy makers can be just as imperative, said Allen Fore, vice president of public affairs for Kinder Morgan, Inc.

Kinder Morgan, Inc. is an oil and natural gas transportation and storage company that operates 80,000 miles of pipeline across the United States. It’s the country’s largest transporter of natural gas, said Fore. In his role, Fore said he spends a lot of time lobbying state and local governments and speaking at conferences or public meetings.

“It’s imperative on the industry, all of us, to better communicate about the very important and significant role the energy infrastructure plays in our economy, because a lot of people just don’t understand it,” he said.

Companies that are look at growing their infrastructure pay close attention to state governments and their regulatory environment, said Fore. Businesses need to ensure their project is economically viable—and that it can be permitted on a predictable schedule.

He pointed to Georgia, which passed legislation banned new pipeline construction and now won’t even accept permit applications. “They’ve since had a little buyer’s remorse on that and are looking at ending that,” said Fore.

“When we’re looking at investing billions of dollars in infrastructure, we’re looking at the states as well,” he added. “States that are not figuring out ways to impede development of infrastructure, but states that are actively pursuing ways to encourage it, are going to be leading. Because companies have choices of where they are going to spend their money and where they are going to invest their money.”